Filling the voids: A look at Kirksville's vacant commercial spaces

Editor's note: This is the third in a series of articles examining the local economy. The first installment, covering local manufacturing, appeared Sept. 30. The second, examining the Highway 63 bypass' impact on Baltimore Street businesses, appeared Oct. 7. The next story in the series will appear in the Oct. 28 edition.

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One of Kirksville's largest and most visible vacant commercial spaces may soon have a new tenant nearly four years since its last business left, though the deal to fill it as well as other commercial properties in the city face numerous hurdles.

Tony Gagliano, agent with the Thomas Realty Group LLC in Bridgeton, Mo., which manages and markets the 25,000-square-foot former Goody's location (vacant since Feb. 2009) at 2104 N. Baltimore St., said he has two "interested, fashion-oriented" businesses currently looking at the former Goody's spot, but he's been close before.

Gagliano said he's had a few deals "signed and delivered" that have been "tabled" at the last minute.

"I get it sold on them," Gagliano said, "and then the traffic count slaps me in the face."

Kirksville's unique location, size and demographics can make a puzzling combination for those trying to fill vacant commercial real estate.

The city's relatively small population would be a detriment, but if potential businesses can be swayed to understand Kirksville's position as a regional hub for northeast Missouri, the numbers look better.

Traffic counts - Gagliano said reports show 16,000 cars traveling in front of that Goody's location daily - might not reach the standards of larger retailers that call for 20,000 vehicles daily, but if they can be convinced college students are more likely to pile four or five people into one car, the reported number might be passable.

But add to that requests involving specific sizes and locations of existing vacant buildings, and one is left with a complex formula.

"As far as the community goes, it's an easy sell," Gagliano said. "The schools up there [Truman State and A.T. Still University], they are not going anywhere, and there's substantial retail in Kirksville already. It's a good, solid town.

"The initial demographics are tough. You have to sell them and explain that Kirksville is the shopping hub for a 50-mile radius," he said. "[People from several counties] are coming up for clothing needs and some other needs."

They are challenges Kirksville Assistant City Manager Melanie Smith has become familiar with. While the Kirksville Regional Economic Development, Inc., and Director of Economic Development Carolyn Chrisman handle manufacturing and industry, commercial and retail requests often filter through Smith's office at City Hall.

The city lists all available commercial buildings on a website managed by Location One Information Systems, which is a tool Smith uses when she receives inquires about available spaces. The site currently lists 20 available commercial buildings within the city limits.

The limited number and locations are both a curse and blessing. On one side, fewer spaces makes it more difficult to bring in new businesses.

"A lot of times they want to either be right by campus, or right on the square, or right by Walmart," Smith said. "We just don't have that many store fronts available right in that location."

But the limited spaces show Kirksville's commercial businesses are on solid financial ground and contribute massive amounts to the area's economic base. Missouri Department of Revenue reports show almost half of the $275 million in sales tax dollars Adair County generated in 2011 came from businesses that one would consider likely to occupy commercial spaces like those being marketed by the city and local realtors.

"I think we're really blessed," said Mark Whitney of Century 21, which is marketing several of the sites listed on locationone.com. "It's remarkable. Most people who come from out of town can't believe how full our commercial area really is."

Some businesses would love to be here, Smith said, if a local person would step forward and purchase franchise rights. She cited Steak 'n Shake as an example of a business residents often talk about wanting to have locally as one that, if a franchise was purchased, could open.

For those looking to enter the world of small business ownership, Smith would refer questions to Christopher Shoemaker, business development specialist with the Missouri Small Business Development Centers of the University of Missouri Extension. Shoemaker is located in Macon and is serving as the local interim counselor until a new director at the local Small Business and Technology Development Center is found.

Many of the services offered are free, Shoemaker said, and help potential business owners assess the viability of their idea and assemble a business plan.

"We try to help hone in on what they want," Shoemaker said.

Some of those potential business sites require extensive renovations or remodeling, the cost of which would be added to the up front dollars spent by someone opening a small business, and can act as a deterrent.

These infrastructure costs could even be a deterrent to larger retailers, which is why Gagliano said his company recently launched a $250,000 roofing project at the former Goody's location and is ready to invest another $300,000 to gut and remodel the inside to suit a future tenant's needs.

The other option for those looking at commercial property is creating new space, which is what Whitney and several other local partners did in recent years to purchase and construct new buildings that now house real estate, legal and medical offices, as well as a Dollar General, on Baltimore Street.

In that case, most of the groundwork was in place to fill the space that was to be created. A more risky practice is building a vacant commercial site, such as a strip mall, and then hoping to attract new businesses.

"Which comes first, the chicken or the egg," Whitney said. "Different communities have built space. It can be a good thing not to have [space], but it can really kind of slow your growth if you don't have it."

There are few guarantees in building new spaces, partly because larger retailers are often secretive about what would attract them to a community. Kohl's, which recently opened a store in Ottuwma, Iowa, responded to an inquire requesting information on statistics and demographics used in locating communities for expansion with the following statement:

"Kohl's looks for communities with high concentrations of families with children. When it makes sense, Kohl's builds stores in new communities near communities already served by Kohl's. We pick convenient locations that are close to where our customers live and work. While we've not announced any plans to open a new store in your community, Kohl's has an ongoing real estate assessment process. At any given time, Kohl's is reviewing sites in communities nationwide."Home Depot, which has opened a store in northern Kirksville in recent years, said their market research and analysis is "proprietary" and declined to offer specifics.

That leaves people like Gagliano trying to find the right mix to attract retailers to the city.

"[The retailers we already have] in buildings in Kirksville are very pleased with the business the receive," he said. "Now, it's just trying to lure that next batch in."